With heavy industries in a race to prove their environmental and social credentials to increasingly demanding investors, mining took a small step backward last quarter.
ESG perceptions of mining deteriorated slightly, with the most negativity coming from community relations and human rights, according to a report by London-based Alva that assigns scores based on publicly available content from social media to NGO research. The most positive issues for the sector were energy management and greenhouse-gas emissions.
Newmont (NYSE: NEM) led the industry with an ESG score of +19 after the gold powerhouse ratified an agreement with the Cedros community in Mexico.
Companies around the world, particularly raw-material producers, are stepping up sustainability efforts amid heightened scrutiny by the general public and investors.
At the other end of the 20-company ranking was Rio Tinto Group, which scored -79 after explosions that damaged two Aboriginal Australian sites
ESG and value-focused exchange traded funds had record net inflows of $18.8 billion in the third quarter, with flows on track to more than double for all of 2020, according to Bloomberg Intelligence. Those focused on climate change might accelerate from the record pace, with potential boosts from the European Green Deal and a Joe Biden presidency in the U.S., BI analyst Shaheen Contractor said.
“There was a notion of ESG being a risk to be mitigated,” Alastair Pickering, co-founder and chief strategy officer at Alva, said in a telephone interview. “Now we’re seeing very clearly the signal shifting, whereby different stakeholders are expecting companies to be actively involved in healing, rather than just not doing harm.”
(By James Attwood)